Sunday, December 20, 2009

BSE NSE Weekly Review 18 Dec 09

Sensex lost 2.3% to end at 17,720 while the Nifty fell 2.5% to shut shop at 4,988. Bears seem to tighten their grip over the Indian bourses, which was otherwise quite lackluster. The Nifty lost nearly 4% from its 52-week high, which it rose to during the previous week. Murky economic outlook, worry of soaring food prices and possible interest rates hike continued to weigh upon the sentiment. For the week, the BSE Sensex lost 2.3% to end at 17,720 while the NSE Nifty fell 2.5% to shut shop at 4,988. The BSE Sensex hit an intra-week high of 17,275 and low of 16,899 while the NSE Nifty hit an intra-week high of 5,156 and low of 4,979 The top gainers: The top gainers in the Sensex were Ranbaxy Labs (up 6.5%), ACC (up 5.5%), Cipla (up 4.7%), Wipro (up 4.7%) and Tata Motors (up 3.1%). The Top Losers: The top losers in the Sensex were HDFC Bank (down 6.8%), DLF (down 6.7%), ICICI Bank (down 6.4%), Reliance Industries (down 5.9%) and SBI (down 5.3%). The BSE IT Index (up 3%): The top gainer in the IT sector was HCL Tech. The stock rose over 5% during the week. A report released by IIFL during the week stated that, “HCL Tech’s US$ organic revenue growth in 2QFY10 was ~10ppt higher than that of its peers Infosys, TCS and Wipro, thanks to its aggressiveness in bidding for new deals in a tight demand environment. Margins, on the other hand, have been under pressure because of acquisitions, a struggling BPO business and deal ramp ups. However, we see relatively better margin tailwinds as large deal rampups stabilise and integration synergies come to the fore. Also, after a year of volatile hedging, the company’s new forex policy indicates stability. Valuations are at ~30% to 45% discount to peers against the historical average of ~17% to 25%. We upgrade our recommendation to ADD”. Wipro surged over 4.5% during the week after reports stated that the company entered into a partnership for an out-tasking of testing services with Telefonica, Germany. TCS gained 3% during the week. According to reports, the company has emerged as the sole bidder for the modernisation and outsourcing contract of UK government’s pension body. Sasken Communication (up 4.7%) and Mphasis (up 4%) were among the other notable gainers. The top losers were Mahindra Satyam (down 9.1%) and Financial Tech (down 3.3%). The BSE Consumer Index: The top losers in the Consumer Durables space were Samtel Color (down 7%), Su-Raj Diamonds (down 3.5%), Whirlpool (down 2.4%), Blue Star (down 2.2%) and Videocon Industries (down 0.6%). The BSE Healthcare Index (up 3.8%): The top gainer in the Pharma space was Dr Reddy's Labs. The stock rose over 9%. The company launched omeprazole, a generic version of AstraZeneca's Prilosec, in the United States. Ranbaxy Labs advanced 6.5% during the week. The company reportedly sold as many as 5 lakh shares of Orchid Chemicals through a bulk deal on Tuesday, well before the latter announced the sale of its generic injectables business to US firm Hospira. Lupin (up 5%), Cipla (up 4.7%) and Sun Pharma (up 4.3%) were among the other major gainers. The top losers were Marksans Pharma (down 4.6%), Astrazeneca Pharma (down 3.3%), Torrent Pharma (down 2.8%) and Pfizer (down 2.3%). Wockhardt shares fell 3.3% during the week. According to reports the tie-up between Kamineni Hospital and the company to run two hospitals seems to be heading for a split. Piramal Healthcare ended lower by 0.6% during the week. A report released by IIFL during the week stated that, “Piramal Healthcare, being one of the largest players open to inorganic growth, would be one of the prime beneficiaries from potential consolidation in the fragmented domestic pharma market. With problems in the CRAMS business easing off, we expect stable growth ahead. The global critical-care business, expanded through recent acquisitions, is strategically well-positioned to take off over the next 3-6 quarters, with increasing market share in existing markets and launches in new markets. The pathology laboratories business is a less well-known growth driver for the medium to long term. We initiate coverage on Piramal Healthcare with BUY rating and price target of Rs492”. The BSE Banking Index (down 5.6%): Disappointing advance tax numbers by banking heavyweights like ICICI Bank and SBI dampened the sentiment; both the stocks fell 2% and 1.6% respectively. The top losers in the banking space were Andhra Bank (down 10%), Allahabad Bank (down 8.2%), Bank of India (down 7.1%), Axis Bank (down 6.9%) and HDFC Bank (down 6.8%). The BSE Auto Index (up 0.2%): The top losers in the auto space were Ashok Leyland (down 4.8%), Maruti Suzuki (down 2.7%), Swaraj Mazda (down 2.4%), Hindustan Motors (down 2%) and Bajaj Auto (down 1.2%). The top gainers in the auto space were Tata Motors (up 3.1%), M&M (up 2.4%) and Hero Honda (up 0.2%). A report released by IIFL during the week stated that, “Most automakers’ margins peaked in 2QFY09. Going forward, increase in commodity prices will put pressure on margins. Furthermore, these cost increases will be difficult to pass on to customers, given: 1) the imminent increase in excise duty rates; and 2) the inevitable increase in costs due to adoption of new emission standards (two-wheelers are already compliant with the most stringent emission norms). On the other hand, a preliminary analysis of the GST code suggests that its adoption could offer auto companies some margin respite. As changes in excise duty and emission norms do not affect prices of tractors, Mahindra & Mahindra (M&M) is the best-placed in this respect. CV companies have already increased prices by ~6% in the past 12 months and hence could find it difficult to raise prices further. We continue to prefer consumption-led stories on the rural side—Hero Honda and Bajaj Auto”. The BSE Oil & Gas Index (down 4.1%): The top losers in the oil & gas space were IOC (down 7.2%), Reliance Industries (down 5.9%), HPCL (down 4.7%), BPCL (down 4.3%) and Jindal Drilling (down 2.1%). The top gainers in the oil & gas space were Gujarat NRE Coke (up 9.1%) and Essar Oil (up 0.4%). The BSE Capital Goods Index (down 1.4%): The top losers in the Capital Goods were Esab India (down 6.5%), Aban Offshore (down 5.4%), Astra Microwave (down 4.8%), Alfa Laval India (down 4.5%) and Alstom Projects (down 3.7%). The top gainers in the Capital Goods space were HEG (up 18.8%), Greaves Cotton (up 12.8%), Ingersoll Rand (up 10.6%), Jyoti Structures (up 5.5%) and Lakshmi Machine (up 2.7%). The Cement Sector: The top gainers in the cement sector were Mangalam Cement (up 15.5%), ACC (up 5.5%), Ultratech Cement (up 4.5%), Dalmia Cement (up 4.2%) and Gujarat Sidhee (up 1.5%). According to a report released by IIFL during the week, “All-India despatches increased 8.8% YoY in November 2009 (YTD growth at 10.7%). • Central region recorded 17% YoY despatch growth, with a rebound in infrastructure spends. South continues to lag. • All-India capacity utilisation declined 230bps YoY to 81%, primarily on account of sharp increase in capacities in the south. • We continue to be negative on south-based companies and positive on north-based companies.” The Telecom Sector: The top losers in the telecom space were Shyam Telecom (down 8.2%), RCom (down 6.3%), Gemini Comm (down 5.9%), Himachal Futuristic (down 5.4%) and MTNL (down 4.9%). Bharti Airtel lost 4.1% during the week. The company is reportedly looking to acquire a controlling stake in phone operator Warid Telecom, Bangladesh. The Realty Sector (down 5.5%): The top losers in the Realty index were Unitech (down 7.4%), DLF (down 6.7%), Mahindra Lifespace (down 6.4%), Ansal Props (down 5.4%) and Omaxe (down 4.2%). The Metals sector (down 1.2%): The top losers were Jindal Steel (down 5%), Lloyds Metals (down 4.1%), Bhuwalka Steel (down 3.5%), Ispat Industries (down 3%) and Tata Metaliks (down 1.4%). The top gainers were Tata Sponge (up 5.4%), Tata Steel (up 3.1%), SAIL (up 1%) and Sunflag Iron (up 1%). Bhushan Steel added 1% during the week. The company is reportedly planning to increase prices of its products by up to Rs1,500 a ton next month. Source IIFL Bought to you by Ingenious Investor Equity Research Division Ravina Consulting No.429 Mahavir Tuscan Near Hoodi Circle, Whitefield Mahadevapura Post BANGALORE 560048 Read - www.ingeniousinvestor.blogspot.com Follow us - www.twitter.com/smartinvestor